Date: 21 Jul 2022 (Thu)
Capital Market Development: China and Asia
- Road to Stock Market Participation
21 Jul 2022, Thursday
10:00 am – 11:10 am, Thursday (Hong Kong Time, UTC+8)
[ Road to Stock Market Participation ]
The authors study the impact of a national road construction program that brought access to previously unconnected pincodes in India, on stock market participation. Using a unique dataset on the trading behaviour of over 13 million individuals, the authors find that construction of new feeder roads to a pincode increases the number of new investors by 28.7% and the number of trades by 64.5% and the effects are larger for rural vs. urban areas and for pincodes at intermediate levels of development. The stock market participation effects are largely driven by new bank branch openings within three years of the road construction suggesting a financial inclusion channel. The authors also see greater effects for pincodes more distant from the nearest big city, greater portfolio diversification, and increased trading in companies located farther away, all suggesting an information channel.
Pulak GHOSH, Professor, Decision Sciences, Indian Institute of Management, Bangalore
Sumit AGARWAL, Low Tuck Kwong Distinguished Professor, Professor of Finance, Economics and Real Estate, National University of Singapore
Meghana AYYAGARI, Professor of International Business and International Affairs, George Washington University; University of Maryland
Yuxi CHENG, PhD Student, George Washington University
Harrison HONG, John R. Eckel, Jr. Professor of Financial Economics; Executive Director, Program for Economic Research, Columbia University
Please register in https://us02web.zoom.us/webinar/register/WN_FZk_FGocSzqssFYBCmntag
About the Webinar
Financial market development goes hand-in-hand with economic growth. The development of China's capital markets in terms of size, regulations, capability, and efficiency has been impressive. China may now even lead globally in some dimensions, notably e-payments systems. Yet, China's capital markets are still a work-in-progress facing both generic and unique challenges. Other Asian capital markets have even greater uneven development. Some in advanced Asian economies have acquired globally acclaimed reputation and capabilities while various regulatory and structural weaknesses dwarf others. Corporations and investors have been inclined to arbitrage cross-border regulatory and developmental gaps; so the very uneven status of capital markets across Asia is a policy issue for the governments in the entire region and perhaps globally. Analysing the positive and negative lessons in the functioning of Asia's capital markets, and identifying reforms and applications of technology that could further improve Asian capital markets' allocation efficiency, financial inclusion, and forewarning against reforms that might cause problems can benefit practitioners, policymakers and researchers, and can contribute significantly to overall prosperity.
The ABFER and the University of Chicago's Becker Friedman Institute China (BFI-China), in collaboration with National University of Singapore (NUS) Business School, Shanghai Advanced Institute of Finance (SAIF), The Chinese University of Hong Kong (CUHK) Department of Economics, CUHK-Shenzhen and Tsinghua University PBC School of Finance (Tsinghua PBCSF), hope to provide a virtual network to benefit researchers, policymakers, and practitioners from Asia and beyond.